Missed the bus again?

Maybe you missed the ‘bus’ and did not get on board for the ride of the last few days?

I would not be too perturbed, although I understand you may feel a bit irritated if you had sold out in recent times only to find the market taking off and possibly approaching the levels you departed. If only you had bought CNP up 71% on Thursday, SDG up 15%, the same day. Nah.

Don’t be too tough on yourselves. To be in on these moves you have to be nothing short of lucky. If you go back to the charts pre April 1 there was little reason to buy this market. And never fear even after such strong moves as we saw on Wednesday and Thursday you will still get plenty of chances to join the gravy train – when the real one arrives.

If we were going into a new bull market – which I don’t believe we are – then there will be time. Not all stocks move at the same pace in bull markets - they follow different patterns and in my experience over numerous bull markets there are constantly new opportunities emerging. A good enough reason not to jump in if you are not feeling quite convinced about the current market.

I always take the view if I don’t understand a market I don’t trade it – no matter how hard it moves. I also have the view it is not so important to get it right but rather to make a heap of money over the medium term and not just in short spurts. And at the same time protect both psychological and financial capital. That is why it is not smart to punt.

So will this market keep heading higher from here? It may but I am not totally convinced but let’s say it does. We know that markets all pull back and part of the discipline of trading is to know when to move, know when to cut. For mine I always need a pullback and I am prepared to sit on the sidelines as I know it will come and that is the safest time to buy – if I wanted to in this current environment.

If it makes you feel any better, investors the world over are standing on the sidelines – it is not just you. Most global indices are showing a similar pattern and it is the minority that has jumped in over the last few days. You are still with the ‘smart money’.